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Strategies & Market Trends : Electronic Contract Manufacture (ECM) Sector -- Ignore unavailable to you. Want to Upgrade?

To: patroller who wrote (1085)	1/8/1998 10:01:00 PM
From: Creditman	Respond to of 2542

Electronic manufacturing requires $1 Million testing machines, robots and the employ of EEs, physicists, etc. An OEM with seasonal requirements running 1 or 2 shifts a day part or even most of the year just cannot possibly keep the expensive staff or afford the costly machines needed. The ECMs run 7X24X365. The OEMs can't do the job ...period! Contract manufacturing is and will continue to ..take over the electronic manufacturing world!!

To: patroller who wrote (1085)	1/9/1998 3:51:00 AM
From: Asymmetric	Read Replies (1) \| Respond to of 2542

Speed in bringing new products to market is actually more important that just money considerations alone for outsourcing. Susan Wang, VP & CFO of Solectron stated: "Time has become the most important reason....To introduce new products and capture market share, the OEMs really have to bring the product from concept to delivery very quickly." An example of the incredible speed with which a company like Solectron can make and deliver a product for another company: (excerpted from Industry Week) "Solectron has been able to reduce cycle time - that is, the time from product order to delivery...Solectron receives what are called prototype bills from customers - essentially a bill of materials to be used to build a product to see if it will work as intended. 'Because we need to schedule some valuable machine time to get that done, we need to get the design information from the customer as rapidly as possible. That way, we can build the product and test it out quickly. We've actually had our engineers go and help customers organize and encrypt their data, so they can ship the information to us via the Internet,' says Ken Ouchi, CIO. 'That way we can build the product and test it out quickly.' Using the Internet as a communications tool, Solectron has been able to reduce the prototype cycle time from a week to a day or two and sometimes less than a day." How many OEMs would be able to match that? None I can think of. When you throw in the fact that electronic products now have shorter product cycles, and all the reasons stated in previous posts, the case for outsourcing manufacturing just becomes too compelling. J.Bash stated he thought 14% of 100% was unrealistic. I think in truth though the final figure/top of the cycle will end up seeing a number far,far closer to 100% than to 50%. JMHO - Peter.